Only one in four companies are prepared for Britain’s full departure from the European Union in five months time, company directors have warned.
Manufacturing firms in particular are unlikely to be ready for the end of the transition period with a lack of clarity on rule changes a bigger impediment to Brexit preparation than the need to focus on the coronavirus pandemic, according to research from the Institute of Directors.
Almost half of 1,000 company directors polled by the IoD said they were unable to prepare now for the changes needed from 31 December, with almost one in three saying they could only make adjustments once the details were clear.
A clear majority, 69% of directors, said that securing a trade deal, rather than crashing out of Europe on World Trade Organization (WTO) terms, was important for their own company. Even among directors who saw positives in divergence from EU rules, seven in 10 said a deal would be important to the economy.
The IoD argued that time to prepare was essential, regardless of the outcome of trade talks between Britain and the EU, and called for a phased implementation of any new regime.
Jonathan Geldart, director-general of the IoD, said: “With so much going on, many directors feel that preparing for Brexit proper is like trying to hit a moving target. Jumping immediately into whatever comes next would be a nightmare for many businesses.
“A commitment to some form of reciprocal phasing-in of changes once clear is a long-standing ask from our members, and the benefits would be significant. At a time when government is rightly straining every sinew to help firms deal with widespread disruption, it would be counterproductive not to seek to minimise it at the end of the year.”
Last month, the UK government relaxed its stance on import controls, saying it would stagger the introduction of summer border checks and tariffs through until summer 2021, regardless of the deal.
However, the EU’s chief negotiator, Michel Barnier, warned on a visit to London last week that the bloc had no intention of reciprocating on delayed border controls after 1 January.
Geldart said that the UK’s proposed unilateral move would be a welcome step but by no means enough. He said: “We need to mitigate disruption across many different sectors on both sides. A phased implementation is in everyone’s interests, and direct financial support for smaller firms would be a huge boost at a difficult time.”